A friend of McHenry County Blog sent a picture of tomorrow’s Village of Fox River Grove Agenda has a very interesting item.
400 Algonquin Road in Fox River Grove is the location of Grove Plating. Grove Plating is one of the oldest businesses in Fox River Grove and has been a family operated business since the early 1950s.
Many Fox River Grove citizens are concerned over a developer’s plan to build a five story apartment building next to the railroad tracks. Plans have not been made public yet as the developer seeks to purchase properties required to build the property.
Property seizure at reduced evaluations is the end game of cram-down/bust-out strategy employed by Zimbabwean Ministers.
Step One: Create circumstances which cause property devaluation. In Zimbabwe, it was price-fixing retail milk below cost of milk production. In McHenry County, the circumstances are crippling property tax rates near 4% of assessed home value.
Step Two: Coerce sale of devalued property. In Zimbabwe, threats of deadly force were employed. In America, threats of deadly legal fees are sufficient.
Step Three: Arrange that no competitive bidding for property will drive up the transfer price. In Zimbabwe only Ministers (and wives, mistresses, and economically effusive ‘friends’) were allowed into the closed-door property sale process. America uses eminent domain to ensure there will be no competitive bidding for crammed-down properties.
Step Four: Original circumstances which caused property devaluation are relaxed or waivered, and property value rises after transfer of ownership has taken place.
Apartment building? What will the property taxes be on the apartment building, versus the tax burden created by new household formation? How much will current taxpaying homeowners in McHenry County need to subsidize the proposed new construction?
Households in McHenry County contain 2.9 persons, and 20% of county population is school aged.
In District 200, in 2011 the annual expenditure per pupil was $14,248 according to:
http://nces.ed.gov/edfin/
(National Center for Education Statistics, a .gov website which allows peer comparison of school district spending)
(Since 2011, enrollment is down and spending has risen significantly so the cost per student is now higher than $14,248 per year).
(At least 70% of the school budget is supplied by property tax revenue, not federal or state funds).
So if each apartment in the proposed building contained 2.9 persons and 20% of them were school-aged, each new household formed would create a new tax burden of:
2.9x .20 x .7($14,248)=$5784.
So without counting a single dollar toward the other expenses associated with property tax revenue, like fire/police/roads/government/MCC/MCCD/libraries/etcetera, each new apartment would require (at minimum)subsidization for any amount less than $5784 per each new apartment pays in annual property taxes.
What is the argument made by the developer about bringing value to the community?
Yes I know that is a different school district in FRG.
I used the school district where I live as an example of calculating tax burden minimums per new household formation because I am familiar with those numbers.
Just about every other town in IL will offer Grove Products economic incentives if they choose to relocate there.
Or the perfect opportunity to GTFO of IL
Does the proposed apartment building have any low income or subsidized units?
In general school districts are not fans of apartment buildings.
The revenue per pupil is less than single family homes.
Kelo v. New London, 545 U.S. 469 (2005),
Supremes ruled government may force transfer of ownership from one private party to another, but benefit to public must be shown.
Local governments were presumed able to decide whether public good was being served.
Is local government in this county trustworthy to determine ‘public good’?
What factors do rulers consider when making that determination?
For this example, is it in the public interest to empower a private individual to profit at public expense (property taxpayers will presumably need to subsidize the tax shortfall created by all new household formation in that building)?